communityleadershipsummitfandomcom-20200213-history
2011/Notes/WhatShouldOpenSourceNonProfitOrgDo
Attendees *Jacob Redding (Drupal) *Angela Byron (Drupal) *Your name here! History/Background Looking at challenges that foundations such as Mozilla Foundation, etc. a non-profit, legal entity with paid staff... what should they be doing? Servers, marketing, interacting with the community... Jacob Redding, on the Drupal Association for 4-something years. DA was a Belgium non-profit. Originally set up just to accept a checque for non-profit. This was all volunteer ran up until last year. But in November 2010, we hired new employees, then some more. Currently have 8 employees working for us full-time. We do a number of different things, amnd have grown considerably. WE run our own conference (3K Us conference, 1.5K Europe, third continent).. we do about 1.5 - 2m in revenue, and expenses to match. So to help, we set up a 501c3 status (created a US entity in 2008, and created org in 2009, were certified in Nov 2010). We sought out a lawyer in Portland who understood open source, spent about 25K, which saved us over 200K. We don't own IP, we don't own/control the project. We don't hire software developers. We don't contribute code to the project, we don't do anything to exert control over the project. Our non-profit organization is completely separate. Discussion Simon (OSI) - Should you be setting them up in the first place? Maybe you shouldn't. If you are not currently running a non-profit foundation for your community, ask yourself if you really need to. There are other umbrella organizations you can go through for support. Geeks think that non-profit foundation can protect you from legal dangers: unwanted corporate interference, software patent threats, tax/liability problems from individual contributors. While these things can be mitigated by a foundation, you should solve these problems first, then create a foundation, not the other way around. Vest all the IP into a non-profit foundation. Beadley (SFC) Look at FLOSS foundations, mailing list for non-profits formed in 2002. In the US thre are two types of non-profit structures you can choose: 501c3, 501c6. Software Freedom Conservancy + DA = 501c3, Linux Foundation = 501c6. 501c3 are currently blocked for open source projects. They're not convinced software can be built for the community good. Differnces are c6 is trade association, and controlled by members. eg. Visa credit card is a non-profit c6. It's designed to serve its members. Linux Foundation is an example. c3s are required to act in the *public* good. Same status as churches/universities. Gold standard in tax deducation; you don't have to pay tax, those who donate to you can write it off. SFC made a list of things we can offer to projects. We're a fiscal sponsor organization. You can join a fiscal sponsor (SFC/SPI), become a member, and then you'll have the benefits of c3 status without becoming an organization. Paul (Open Source Matters) - We are a non-profit, not a c3 or c6. We're a non-profit registered in state of NY (not a charity). Bulk of our revenue comes in from advertising. If your organization gets most of its revenue from advertising, this isn't tax-exempt. With our revenue model, can't take advantage of status. We pay state/federal taxes, and sponsorships are not tax-exemptable. Simon (OSI) - Where you get money from, what you do with it is linked to c3 vs. c6. c3 needs diverse sources of funding. c6 can have more limited. What you can spend money on is limited as well. c3 has a lot of constraints around it. Jacob (DA) - This is what we do: Events, we run DrupalCon and CXO events to help freelancers get business skills. We do community building, fiscal sponsorships of camps. We do community cultivation grants, to help w/ community building: Training, camps, etc. Membership benefits, people can be a member and we grant them discounts on software, access to trainings, etc. "Home improvement" - adding functionality to drupal.org (NOT the software, the website). Infrastructure, and working to support OSUOSL. Long-term, we also want to be similar to the WP foundation, we want to accept the trademark and be a neutral party on that. Chelsea (WP) - Jane and I work for Automattic, and also work on open source project for WP. Automattic pays us to work on WP, but doesn't control the project. Jane (WP) - The more complicated issue is when founders own companies, general users assume that Acquia owns Drupal, Automattic owns WordPress, etc. Chelsea (WordPress) - The WordPress Foundation was created in 2010 (c3), but thinking about changing to d status so we can take fees as well as donations to allow WordCamp events can help fund. Think it was DC office we worked with. Original application for WP Foundation was 2006. It was going to "shepherd" the project, and do support stuff, but not. WP / WP Foundation could be swapped out. Now, it's an "eductaional public charity", used to promote learning about WP. We can promote events, we can buy video cameras to send to events, we could pay money for servers to host videos, but not to host SVN. Matt pays for servers himself, and WP Foundation working on trademark registration in other countries. We don't have employees. We work on WP Foundation start as part of our job at Automattic (time donated). WP Foundation exists because Matt thought it was the right thing to do, and Automattic could be sold, go public, etc. and that complete control/benevolent dictatorship cannot be guaranteed. By donating trademark to the foundation, this helps ensure protection. Matt still owns WP.org domain name. Bradley (SFC) - Involved in non-profits since 1997. I'm associated with FSF (advocay organization) and SFC (employee as well). We're what's called a fiscal sponsor. This was invented mostly for the art world, not good at running non-profits. :) Basically, project joins the non-profit and becomes part of it. Organiation creates structure to run the non-profit and do everything they can't do. We wrote our IRS forms very general. We wanted to offer a service plan for everything a c3 organization can do. We do: conference stuff, trademark holding, trademark enforcement, pay developers (1099 contractors so no health insurance), we do everything a non-profit can do, not taking money for advertising. What we do when a project applies is we require them to define their leadership structure, and this is written into agreement. They define how project is led, and this forms a leadership committee who decides how the money is spent. Most fiscal sponsorships will take earmarked donations (can donate to either SFC or project X). We act as "omnibus" would offer any service that a non-profit can do. Jacob (DA) - Anything you wouldn't do? Bradley (SFC) - Nothing that isn't prohibited by the IRS. We require people to make their projects public (public good). We also are sometimes constrained by resources. We have a list of services we already provide, for new services we check to see if we're allowed to do it and then I can. Alex (OW2) - We're not a c3/c6, because we have a French association status. We promote software that's developed by our members (host for set of projects). We provide a platform for member projects: organize events, gathering booths at other conferences, we do PR for members, we provide infrastructure (website, tools for development). We can get deals from vendors and make those tools available. We participate in dissemination of project results. We have local chapters, governance organizations, run initiatives (vertical stacks of projects together to deliver integrated solutions), run project contests. We DON'T do copyright/licensing, direct software development, interfere with businesses, etc. We just facilitate (provide tools/infrastructure). A lot of small companies like this because they wouldn't have resource to put on events themselves. We can provide projects independence of their parent companies. Jacob (DA) - Typo3/Mozilla hires developers. Owns the servers, owns the trademark... Paul (OSM) - OSM is the legal owner of the Joomla trademark. It's a non-profit that exists to support the Joomla lproject. Primary responsibilities are to protect the trademark, finance the development of project. Later, taking on events. We're different from DA. We own the budget for the Joomla project. We coordinate with leaders from teams to find out what they want funding for. OSM consolidates to an overall budget. We have budget line items as well, and go out and raise money (sponsorships), etc. OSM manages finances directly. We pay for everything too... infrastructure, development (potentially). There's no one paid in OSM/Joomla right now. In terms of events, just tiny baby steps for now. Decentralized volunteer model for "Joomla Days" (local events). We support financially any of those efforts for anyone around the world who wants to run one. Plans next year for big Joomla world conference. Jacob (Drupal) - What happened w/ paying for devleopment? Paul (OSM) - Conscious decision to stop it. Lots of drama. A lot of real good long-time core developers brought on as paid developers. Wasn't communicated to community up-front. It was presented to community after-the-fact as experiment. The community didn't like this. The perception was "you guys tried to pull something behind our backs, do something under the table." After those contracts were completed, weren't renewed. We're open to paying developers in the future, but licking our wounds. Angie (Drupal) - How did that impact pariticpation after they stopped geting paid? Paul (OSM) - One, it did cut down on their involvement in community, other it didn't. One guy was more of an architect. Not really heads-down development work. He's since gotten a full-time job with eBay, gets one day a week to work for us in that role. Other guy is still involved, but not near as much. Feeling personally burned, like he was made out to be a bad guy by OSM. He feels like he got the short-end fo the stick from the community. Beadley (SFC) - Can confirm that paying developers causes drama. I would like to see us shift toward non-profit funding.. have had a lot of drama where SFC is funding developers. Need to make sure they're *specific* projects, short-term. No one is staffed to work on it. Here's a feature set, here's a number of hours, etc. Paul (OSM) - If we're going to do this in the future, going to ask community first, get input/feedback. Specific project vs. open-ended is another thing. Feedback from community is if you want to hire a couple of developers, accept applications instead of picking old-timers. Henrik () - Didn't realize this was such a big problem. It'd be great if we could have developers who are paid by donated money instead of one big company. Could we create something where we siphon it? Could we create separate orgs for "support" vs. "hire developers to work on X" that's not in charge of project. Mozilla Foundation is the opposite; they hire a lot of developers. Bradley (SFC) - One idea is non-profit open soure developer "co-op". Would love to see that explored. Simon (OSI) - Linux Foundation and Mozilla Foundation the only examples of paying developers that work. Paying developers is a really, really bad idea. An open source project is about people bringing their own intrinsic motivations. Jane (WP) - I would *love* to pay developers so they didn't have to do consulting stuff. We don't hire someone because they'd mostly be administrative staff. We could hire people to work on website, but can't pay core developers. Alan (OpenSuSE) - We have a community that's set up and governed by the community. Community has a monitoring board that runs the community. SuSE has granted trademarks to that community board to manage. They're managing events, managing principles of commnunity, guidelines, trademarks, etc. We haven't moved this into a formal foundation, but heading that way. The more the community gets involved, the more you want them to take ownership/control. So setting up a legal entity can help with this. This started from concerns around Novell. "Whoever buys Novell owns the community." Part of the reason you contribute as a community member is you want to give to something that will go on and survive, want to ensure the survivability, give peace of mind. When we set it up, not going to hire developers. Community doesn't need that. Keep it simple. AttachMate owns the trademark currently. SuSE is a commercial trademark. OpenSuSE is the community's trademark. Brad (SFC) - Point you're getting to is a meta-service that non-profits can provide, because they have a legal binding to do things in the public interest. For-profit company does not. c3 can provide public scrutiny aspect. Jacon (DA) - Agreed. One of the primary reasons we set up DA is for neutrality. Simon (OSI) - Sets up a layer of protection around corporate gaming. When you're a corporation owning some vital assets of community, community sees the creation of a neutral place sees this as a show of good will, and intent to stay true to your word. When you don't do that, it creates suspicion about what happens when Oracle buys Sun... Kathy (freegeek) - When we say "corporate" we're doing a disservice. Most of the time we mean monopoly capital. If nothing else, we need for-profit business entity. Non-profits are corporations, incoporated for a purpose to enforce membership rules and policies. You provide rights/responsibilities of members, baord, etc. These things are backed up by law so it's not just good friends doing a project, but also adopting a formal structure. Stephen (Outercurve) - Microsoft hit a point a few years ago where there was so much pent-up demand for developers, because new developers coming out of university coming out very invested in open source. Microsoft initially said "can't take the liability risk", so created a non-profit legal entity to hold the software to create a liability firewall. Had an interim board until hiring an executive director/technical director. We are now asking ourselves what we're doing here? Neutral place for corporation to encourage development. Microsoft is still primary sponsor, hunting for other sponsors. We are a corporation, but a non-profit (c6). We've set up code signing, anything that's more administrative/legal, license agreements around incoming contributions. When corporations want to do open source, they want reassurance around management of those assets. Bradley (SFC) - We're not the same. We're a member organization for public good, Outercurve is a trade organization trying to server for-profit members. Service plan-wise, we're the same. But the way we come down on various issues is going to very different. Jacon (DA) - I'm an open source developer, my project's hitting it big, what do I do? You need something that takes your trademark/copyright to a neutral non-profit. Bradley (SFC) Apply to fiscal sponsorship first, the moment you think "Do we need a structure?" This will help you explore "Do I want to start my own?" Apply to all of them when you first have that thought. Explore it in full. Allow someone to grow early, and then spin out. Monty (MariaDB) - MariaDB is a for-profit company (for paying salaries) totally owned by the employees. Trying to make it easier for sponsors to donate money to us. Everything we do is in the public good. We can accept fiunds for completing features, but hard to accept a check for "You're doing good, keep doing what you're doing." Not a US entity. Employees are everywhere. For-profit corporation, shareholders own the company. Money is based around services: work for customers, extensions, 3rd-level support for critical bugs, other projects do front-support. Everything is done open source. We give out patches so people can keep using Oracle's licenses with our code. Kathy (freegeek) - UPS (shipping company) has given lots of shares to employees. Other examples are creating a collective management for a for-profit. Jcob Have you seen resistance to volunteers giving code to a for-profit company? No. All the money we do is to make sure we can make sure we keep doing what we're doing. Jacob (DA) - An example of an open source project that doesn't have that perception is SugarCRM. But that's because of closed-source vs. open-source Adam (Tengen (MongoDB)) - We're a VC-backed org around MongoDB. Interested in what other non-profits doing. We want to make sure that the content/code we're putting out is really easily accessible. WAnt to make sure event material is easily accessible to any developer. Under current leadership, we can maintain friendliness to the open source community. But going forward, with a for-profit corporation ownership who knows what happens a few years down the line? A lot of our community is projects like Drupal who are using our software, and using to fund these concerns. BUt the majority of the development is done in-house. Monty - This is challenging because you have outside investors who will eventually want a pay-off, you're not just funding your employees. Adam - Right. VC Companies might care about public good, but it's about flipping the deal. Monty - By your 2nd or 3rd funding you can't do anything Adam - We've gone through 3 rounds. Our VCs aren't on our backs atm. Monty - You should act now. Ed (Mifos) - Part of gramene foundatrion. Our project is specialized app around microfinance. Small user/developer community. Driven by philanthropic donations, but there's been a for-profit owner of those donations, so tends to be feature-focused. Community aspects not always a priority. Main funder is dropping out, so project is going to pushed to completely independent project. Looking to apply to SFC to keep going. Loss of funding doesn't mean loss of product or community. Migos very strong in the community area; has a large ecosystem that wants to support/service, but supporting this hasn't been the interest of donors, now want to focus on building community. Michael - This is all "who pays for the shit work?" Relatively safe to pay developer for things with no community traction. Two days fo FLOSS foundation meetings, if you really want to get into it. Summary Non-controversial things to do (reason you might set up a foundation/partner with SFC): *Fund/maintain Infrastructure *Run events *Trademark holding/enforcement *Act as neutral protector of project (create Switzerland ;)) *Fiscal sponsorship *Reimbursing for travel for conferences *Marketing materials Controversial things to do ("It's complicated"): *Hire developers *Copyright holding *Copyright enforcement